12. Recall the example of Linesville from class. There are two sandwich shops at either end of Main Street which is 20 miles long Subway on the east end of town and Quizno's on the west end. The 80 residents of Linesville all live on Main Street. They are evenly distributed along Main Street. Each of these residents values a sandwich at $10, but for those who live further away from one of the shops, they must incur an additional cost of transportation. a. (5 points) Suppose that their cost of transportation is .5 per mile and each store charges $5. Calculate the sales at each store. b. (5 points) Suppose that their cost of transportation goes up to $.75 from .5, while the price of one sandwich remains the same. Calculate the sales at both stores. c. (5 points) Now suppose that the price of a sandwich at Quizno's falls to $3. The transportation costs are still $.75. How does that affect the sales at the two stores? d. (5 points) What intuition can you draw from this about the magnitude of price competition in various types of markets (Hint: think specifically about product differentiation and switching costs)